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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
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Delaware
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22-1867895
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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475 Steamboat Road, Greenwich, Connecticut
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06830
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(Address of principal executive offices)
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(Zip Code)
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(203) 629-3000
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(Registrant’s telephone number, including area code)
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None
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Former name, former address and former fiscal year, if changed since last report
.
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Emerging growth company
o
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EX-31.1
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EX-31.2
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EX-32.1
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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Item 1.
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Financial Statements
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
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(Unaudited)
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(Audited)
|
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturity securities
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$
|
13,514,085
|
|
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$
|
13,190,668
|
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Investment funds
|
1,190,963
|
|
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1,198,146
|
|
||
Real estate
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1,317,089
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|
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1,184,981
|
|
||
Arbitrage trading account
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634,016
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|
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299,999
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||
Equity securities available for sale
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612,807
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669,200
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||
Loans receivable
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96,064
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|
|
106,798
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|
||
Total investments
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17,365,024
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|
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16,649,792
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|
||
Cash and cash equivalents
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788,354
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|
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795,285
|
|
||
Premiums and fees receivable
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1,867,048
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|
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1,701,854
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|
||
Due from reinsurers
|
1,646,587
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1,743,980
|
|
||
Deferred policy acquisition costs
|
539,961
|
|
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537,890
|
|
||
Prepaid reinsurance premiums
|
482,258
|
|
|
413,140
|
|
||
Trading account receivables from brokers and clearing organizations
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164,696
|
|
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484,593
|
|
||
Property, furniture and equipment
|
424,984
|
|
|
349,432
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|
||
Goodwill
|
144,913
|
|
|
144,513
|
|
||
Accrued investment income
|
136,663
|
|
|
127,047
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|
||
Other assets
|
433,003
|
|
|
402,550
|
|
||
Total assets
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$
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23,993,491
|
|
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$
|
23,350,076
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|
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|
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|
||||
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Reserves for losses and loss expenses
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$
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11,324,267
|
|
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$
|
11,197,195
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Unearned premiums
|
3,425,534
|
|
|
3,283,300
|
|
||
Due to reinsurers
|
221,633
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|
|
213,128
|
|
||
Trading account securities sold but not yet purchased
|
62,860
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|
|
51,179
|
|
||
Federal and foreign income taxes
|
94,887
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|
|
119,597
|
|
||
Other liabilities
|
1,051,322
|
|
|
916,318
|
|
||
Senior notes and other debt
|
1,759,115
|
|
|
1,760,595
|
|
||
Subordinated debentures
|
727,924
|
|
|
727,630
|
|
||
Total liabilities
|
18,667,542
|
|
|
18,268,942
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, par value $.10 per share:
|
|
|
|
||||
Authorized 5,000,000 shares; issued and outstanding - none
|
—
|
|
|
—
|
|
||
Common stock, par value $.20 per share:
|
|
|
|
||||
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 121,271,028 and 121,193,599 shares, respectively
|
47,024
|
|
|
47,024
|
|
||
Additional paid-in capital
|
1,057,939
|
|
|
1,037,446
|
|
||
Retained earnings
|
6,735,066
|
|
|
6,595,987
|
|
||
Accumulated other comprehensive income
|
133,302
|
|
|
55,568
|
|
||
Treasury stock, at cost, 113,846,890 and 113,924,319 shares, respectively
|
(2,686,813
|
)
|
|
(2,688,817
|
)
|
||
Total stockholders’ equity
|
5,286,518
|
|
|
5,047,208
|
|
||
Noncontrolling interests
|
39,431
|
|
|
33,926
|
|
||
Total equity
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5,325,949
|
|
|
5,081,134
|
|
||
Total liabilities and equity
|
$
|
23,993,491
|
|
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$
|
23,350,076
|
|
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For the Three Months
|
|
For the Six Months
|
||||||||||||
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Ended June 30,
|
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Ended June 30,
|
||||||||||||
|
2017
|
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2016
|
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2017
|
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2016
|
||||||||
REVENUES:
|
|
|
|
|
|
|
|
||||||||
Net premiums written
|
$
|
1,564,251
|
|
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$
|
1,642,569
|
|
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$
|
3,211,089
|
|
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$
|
3,306,291
|
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Change in net unearned premiums
|
4,452
|
|
|
(82,776
|
)
|
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(72,345
|
)
|
|
(219,163
|
)
|
||||
Net premiums earned
|
1,568,703
|
|
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1,559,793
|
|
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3,138,744
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|
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3,087,128
|
|
||||
Net investment income
|
135,264
|
|
|
129,049
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|
|
284,123
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|
|
259,182
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|
||||
Net realized investment gains
|
40,453
|
|
|
6,315
|
|
|
92,801
|
|
|
31,772
|
|
||||
Other-than-temporary impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,114
|
)
|
||||
Revenues from non-insurance businesses
|
69,857
|
|
|
123,764
|
|
|
135,247
|
|
|
225,544
|
|
||||
Insurance service fees
|
33,584
|
|
|
36,939
|
|
|
66,864
|
|
|
77,301
|
|
||||
Other income
|
188
|
|
|
54
|
|
|
688
|
|
|
312
|
|
||||
Total revenues
|
1,848,049
|
|
|
1,855,914
|
|
|
3,718,467
|
|
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3,663,125
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|
||||
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
964,698
|
|
|
964,162
|
|
|
1,944,302
|
|
|
1,886,483
|
|
||||
Other operating costs and expenses
|
616,632
|
|
|
581,955
|
|
|
1,220,332
|
|
|
1,164,414
|
|
||||
Expenses from non-insurance businesses
|
68,959
|
|
|
116,731
|
|
|
134,978
|
|
|
212,262
|
|
||||
Interest expense
|
36,799
|
|
|
34,752
|
|
|
73,597
|
|
|
66,976
|
|
||||
Total operating costs and expenses
|
1,687,088
|
|
|
1,697,600
|
|
|
3,373,209
|
|
|
3,330,135
|
|
||||
Income before income taxes
|
160,961
|
|
|
158,314
|
|
|
345,258
|
|
|
332,990
|
|
||||
Income tax expense
|
(51,388
|
)
|
|
(49,408
|
)
|
|
(111,011
|
)
|
|
(103,837
|
)
|
||||
Net income before noncontrolling interests
|
109,573
|
|
|
108,906
|
|
|
234,247
|
|
|
229,153
|
|
||||
Noncontrolling interests
|
(569
|
)
|
|
61
|
|
|
(1,796
|
)
|
|
(676
|
)
|
||||
Net income to common stockholders
|
$
|
109,004
|
|
|
$
|
108,967
|
|
|
$
|
232,451
|
|
|
$
|
228,477
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.87
|
|
|
$
|
0.89
|
|
|
$
|
1.88
|
|
|
$
|
1.86
|
|
Diluted
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
1.81
|
|
|
$
|
1.78
|
|
|
For the Three Months
|
|
For the Six Months
|
||||||||||||
|
Ended June 30,
|
|
Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income before noncontrolling interests
|
$
|
109,573
|
|
|
$
|
108,906
|
|
|
$
|
234,247
|
|
|
$
|
229,153
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized currency translation adjustments
|
20,247
|
|
|
(55,870
|
)
|
|
42,982
|
|
|
(57,917
|
)
|
||||
Change in unrealized investment gains, net of taxes
|
43,597
|
|
|
105,033
|
|
|
34,766
|
|
|
181,888
|
|
||||
Other comprehensive income
|
63,844
|
|
|
49,163
|
|
|
77,748
|
|
|
123,971
|
|
||||
Comprehensive income
|
173,417
|
|
|
158,069
|
|
|
311,995
|
|
|
353,124
|
|
||||
Noncontrolling interests
|
(602
|
)
|
|
56
|
|
|
(1,810
|
)
|
|
(667
|
)
|
||||
Comprehensive income to common stockholders
|
$
|
172,815
|
|
|
$
|
158,125
|
|
|
$
|
310,185
|
|
|
$
|
352,457
|
|
|
For the Six Months
|
||||||
|
Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
COMMON STOCK:
|
|
|
|
||||
Beginning and end of period
|
$
|
47,024
|
|
|
$
|
47,024
|
|
ADDITIONAL PAID-IN CAPITAL:
|
|
|
|
||||
Beginning of period
|
$
|
1,037,446
|
|
|
$
|
1,005,455
|
|
Restricted stock units issued including tax benefit
|
(1,356
|
)
|
|
(191
|
)
|
||
Restricted stock units expensed
|
20,788
|
|
|
16,350
|
|
||
Stock issued
|
1,061
|
|
|
—
|
|
||
End of period
|
$
|
1,057,939
|
|
|
$
|
1,021,614
|
|
RETAINED EARNINGS:
|
|
|
|
||||
Beginning of period
|
$
|
6,595,987
|
|
|
$
|
6,178,070
|
|
Net income to common stockholders
|
232,451
|
|
|
228,477
|
|
||
Dividends
|
(93,372
|
)
|
|
(30,654
|
)
|
||
End of period
|
$
|
6,735,066
|
|
|
$
|
6,375,893
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
|
|
|
||||
Unrealized investment gains:
|
|
|
|
||||
Beginning of period
|
$
|
427,154
|
|
|
$
|
180,695
|
|
Unrealized gains on securities not other-than-temporarily impaired
|
33,908
|
|
|
180,714
|
|
||
Unrealized gains on other-than-temporarily impaired securities
|
844
|
|
|
1,183
|
|
||
End of period
|
461,906
|
|
|
362,592
|
|
||
Currency translation adjustments:
|
|
|
|
||||
Beginning of period
|
(371,586
|
)
|
|
(247,393
|
)
|
||
Net change in period
|
42,982
|
|
|
(57,917
|
)
|
||
End of period
|
(328,604
|
)
|
|
(305,310
|
)
|
||
Total accumulated other comprehensive income
|
$
|
133,302
|
|
|
$
|
57,282
|
|
TREASURY STOCK:
|
|
|
|
||||
Beginning of period
|
$
|
(2,688,817
|
)
|
|
$
|
(2,563,605
|
)
|
Stock exercised/vested
|
1,276
|
|
|
1,717
|
|
||
Stock repurchased
|
—
|
|
|
(37,424
|
)
|
||
Stock incentive plans expensed
|
728
|
|
|
—
|
|
||
End of period
|
$
|
(2,686,813
|
)
|
|
$
|
(2,599,312
|
)
|
NONCONTROLLING INTERESTS:
|
|
|
|
||||
Beginning of period
|
$
|
33,926
|
|
|
$
|
32,962
|
|
Contributions
|
3,695
|
|
|
2,923
|
|
||
Net income
|
1,796
|
|
|
676
|
|
||
Other comprehensive income (loss), net of tax
|
14
|
|
|
(9
|
)
|
||
End of period
|
$
|
39,431
|
|
|
$
|
36,552
|
|
|
For the Six Months
|
||||||
|
Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
CASH FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income to common stockholders
|
$
|
232,451
|
|
|
$
|
228,477
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Net investment gains
|
(92,801
|
)
|
|
(13,658
|
)
|
||
Depreciation and amortization
|
44,679
|
|
|
46,873
|
|
||
Noncontrolling interests
|
1,796
|
|
|
676
|
|
||
Investment funds
|
(35,544
|
)
|
|
(35,092
|
)
|
||
Stock incentive plans
|
22,508
|
|
|
17,876
|
|
||
Change in:
|
|
|
|
||||
Arbitrage trading account
|
(2,440
|
)
|
|
(2,303
|
)
|
||
Premiums and fees receivable
|
(159,827
|
)
|
|
(174,811
|
)
|
||
Reinsurance accounts
|
34,985
|
|
|
(100,545
|
)
|
||
Deferred policy acquisition costs
|
(2,236
|
)
|
|
(50,578
|
)
|
||
Income taxes
|
(42,626
|
)
|
|
8,269
|
|
||
Reserves for losses and loss expenses
|
101,781
|
|
|
239,621
|
|
||
Unearned premiums
|
140,399
|
|
|
276,815
|
|
||
Other
|
(18,267
|
)
|
|
(109,302
|
)
|
||
Net cash from operating activities
|
224,858
|
|
|
332,318
|
|
||
CASH USED IN INVESTING ACTIVITIES:
|
|
|
|
||||
Proceeds from sale of fixed maturity securities
|
2,069,718
|
|
|
716,674
|
|
||
Proceeds from sale of equity securities
|
89,340
|
|
|
14,558
|
|
||
Distributions from investment funds
|
49,594
|
|
|
7,632
|
|
||
Proceeds from maturities and prepayments of fixed maturity securities
|
888,423
|
|
|
1,191,548
|
|
||
Purchase of fixed maturity securities
|
(3,164,892
|
)
|
|
(2,238,683
|
)
|
||
Purchase of equity securities
|
(787
|
)
|
|
(126,414
|
)
|
||
Real estate purchased
|
(109,846
|
)
|
|
(114,434
|
)
|
||
Change in loans receivable
|
10,734
|
|
|
130,267
|
|
||
Net additions to property, furniture and equipment
|
(89,715
|
)
|
|
(21,224
|
)
|
||
Change in balances due to security brokers
|
104,463
|
|
|
51,918
|
|
||
Payment for business purchased net of cash aquired
|
(71,346
|
)
|
|
(41,213
|
)
|
||
Net cash used in investing activities
|
(224,314
|
)
|
|
(429,371
|
)
|
||
CASH (USED IN) FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Repayment of senior notes and other debt
|
(1,475
|
)
|
|
(38,427
|
)
|
||
Net proceeds from issuance of debt
|
—
|
|
|
388,901
|
|
||
Cash dividends to common stockholders
|
(15,758
|
)
|
|
(30,655
|
)
|
||
Purchase of common treasury shares
|
—
|
|
|
(37,424
|
)
|
||
Other, net
|
(1,260
|
)
|
|
(926
|
)
|
||
Net cash (used in) from financing activities
|
(18,493
|
)
|
|
281,469
|
|
||
Net impact on cash due to change in foreign exchange rates
|
11,018
|
|
|
663
|
|
||
Net change in cash and cash equivalents
|
(6,931
|
)
|
|
185,079
|
|
||
Cash and cash equivalents at beginning of year
|
795,285
|
|
|
763,631
|
|
||
Cash and cash equivalents at end of period
|
$
|
788,354
|
|
|
$
|
948,710
|
|
|
For the Three Months
|
|
For the Six Months
|
||||||||
|
Ended June 30,
|
|
Ended June 30,
|
||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Basic
|
125,334
|
|
|
122,616
|
|
|
123,623
|
|
|
122,698
|
|
Diluted
|
128,601
|
|
|
128,575
|
|
|
128,546
|
|
|
128,562
|
|
(In thousands)
|
2017
|
||
|
|
||
Cash and cash equivalents
|
$
|
1,154
|
|
Real estate, furniture and equipment
|
6,434
|
|
|
Goodwill and other intangibles assets
|
62,406
|
|
|
Other assets
|
9,417
|
|
|
Total assets acquired
|
79,411
|
|
|
|
|
||
Other liabilities assumed
|
(1,911
|
)
|
|
Noncontrolling interest
|
(5,000
|
)
|
|
Net assets acquired
|
$
|
72,500
|
|
(In thousands)
|
Unrealized Investment Gains (Losses)
|
|
Currency Translation Adjustments
|
|
Accumulated Other Comprehensive Income
|
||||||
As of and for the six months ended June 30, 2017:
|
|
|
|
|
|||||||
Changes in AOCI
|
|
|
|
|
|||||||
Beginning of period
|
$
|
427,154
|
|
|
$
|
(371,586
|
)
|
|
$
|
55,568
|
|
Other comprehensive income before reclassifications
|
89,309
|
|
|
42,982
|
|
|
132,291
|
|
|||
Amounts reclassified from AOCI
|
(54,543
|
)
|
|
—
|
|
|
(54,543
|
)
|
|||
Other comprehensive income
|
34,766
|
|
|
42,982
|
|
|
77,748
|
|
|||
Unrealized investment gain related to non-controlling interest
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
End of period
|
$
|
461,906
|
|
|
$
|
(328,604
|
)
|
|
$
|
133,302
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
(83,912
|
)
|
(1)
|
$
|
—
|
|
|
$
|
(83,912
|
)
|
Tax effect
|
29,369
|
|
(2)
|
—
|
|
|
29,369
|
|
|||
After-tax amounts reclassified
|
$
|
(54,543
|
)
|
|
$
|
—
|
|
|
$
|
(54,543
|
)
|
Other comprehensive income
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
58,711
|
|
|
$
|
42,982
|
|
|
$
|
101,693
|
|
Tax effect
|
(23,945
|
)
|
|
—
|
|
|
(23,945
|
)
|
|||
Other comprehensive income
|
$
|
34,766
|
|
|
$
|
42,982
|
|
|
$
|
77,748
|
|
|
|
|
|
|
|
||||||
As of and for the three months ended June 30, 2017:
|
|
|
|
|
|||||||
Changes in AOCI
|
|
|
|
|
|||||||
Beginning of period
|
$
|
418,342
|
|
|
$
|
(348,851
|
)
|
|
$
|
69,491
|
|
Other comprehensive income before reclassifications
|
69,315
|
|
|
20,247
|
|
|
89,562
|
|
|||
Amounts reclassified from AOCI
|
(25,718
|
)
|
|
—
|
|
|
(25,718
|
)
|
|||
Other comprehensive income
|
43,597
|
|
|
20,247
|
|
|
63,844
|
|
|||
Unrealized investment gain related to non-controlling interest
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
|||
End of period
|
$
|
461,906
|
|
|
$
|
(328,604
|
)
|
|
$
|
133,302
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
(39,566
|
)
|
(1)
|
$
|
—
|
|
|
$
|
(39,566
|
)
|
Tax effect
|
13,848
|
|
(2)
|
—
|
|
|
13,848
|
|
|||
After-tax amounts reclassified
|
$
|
(25,718
|
)
|
|
$
|
—
|
|
|
$
|
(25,718
|
)
|
Other comprehensive income
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
68,282
|
|
|
$
|
20,247
|
|
|
$
|
88,529
|
|
Tax effect
|
(24,685
|
)
|
|
—
|
|
|
(24,685
|
)
|
|||
Other comprehensive income
|
$
|
43,597
|
|
|
$
|
20,247
|
|
|
$
|
63,844
|
|
|
|
|
|
|
|
(In thousands)
|
Unrealized Investment Gains (Losses)
|
|
Currency Translation Adjustments
|
|
Accumulated Other Comprehensive Income
|
||||||
As of and for the six months ended June 30, 2016:
|
|
|
|
|
|||||||
Changes in AOCI
|
|
|
|
|
|||||||
Beginning of period
|
$
|
180,695
|
|
|
$
|
(247,393
|
)
|
|
$
|
(66,698
|
)
|
Other comprehensive income before reclassifications
|
191,791
|
|
|
(57,917
|
)
|
|
133,874
|
|
|||
Amounts reclassified from AOCI
|
(9,903
|
)
|
|
—
|
|
|
(9,903
|
)
|
|||
Other comprehensive income
|
181,888
|
|
|
(57,917
|
)
|
|
123,971
|
|
|||
Unrealized investment losses related to non-controlling interest
|
9
|
|
|
—
|
|
|
9
|
|
|||
End of period
|
$
|
362,592
|
|
|
$
|
(305,310
|
)
|
|
$
|
57,282
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
(15,235
|
)
|
(1)
|
$
|
—
|
|
|
$
|
(15,235
|
)
|
Tax effect
|
5,332
|
|
(2)
|
—
|
|
|
5,332
|
|
|||
After-tax amounts reclassified
|
$
|
(9,903
|
)
|
|
$
|
—
|
|
|
$
|
(9,903
|
)
|
Other comprehensive income
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
270,995
|
|
|
$
|
(57,917
|
)
|
|
$
|
213,078
|
|
Tax effect
|
(89,107
|
)
|
|
—
|
|
|
(89,107
|
)
|
|||
Other comprehensive income
|
$
|
181,888
|
|
|
$
|
(57,917
|
)
|
|
$
|
123,971
|
|
|
|
|
|
|
|
||||||
As of and for the three months ended June 30, 2016:
|
|
|
|
|
|||||||
Changes in AOCI
|
|
|
|
|
|||||||
Beginning of period
|
$
|
257,564
|
|
|
$
|
(249,440
|
)
|
|
$
|
8,124
|
|
Other comprehensive income before reclassifications
|
113,549
|
|
|
(55,870
|
)
|
|
57,679
|
|
|||
Amounts reclassified from AOCI
|
(8,516
|
)
|
|
—
|
|
|
(8,516
|
)
|
|||
Other comprehensive income
|
105,033
|
|
|
(55,870
|
)
|
|
49,163
|
|
|||
Unrealized investment gain related to non-controlling interest
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||
End of period
|
$
|
362,592
|
|
|
$
|
(305,310
|
)
|
|
$
|
57,282
|
|
Amounts reclassified from AOCI
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
(13,101
|
)
|
(1)
|
$
|
—
|
|
|
$
|
(13,101
|
)
|
Tax effect
|
4,585
|
|
(2)
|
—
|
|
|
4,585
|
|
|||
After-tax amounts reclassified
|
$
|
(8,516
|
)
|
|
$
|
—
|
|
|
$
|
(8,516
|
)
|
Other comprehensive income
|
|
|
|
|
|
||||||
Pre-tax
|
$
|
156,605
|
|
|
$
|
(55,870
|
)
|
|
$
|
100,735
|
|
Tax effect
|
(51,572
|
)
|
|
—
|
|
|
(51,572
|
)
|
|||
Other comprehensive income
|
$
|
105,033
|
|
|
$
|
(55,870
|
)
|
|
$
|
49,163
|
|
|
|
|
|
|
|
(In thousands)
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||||
Gains
|
|
Losses
|
|
||||||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal
|
$
|
64,931
|
|
|
$
|
14,943
|
|
|
$
|
—
|
|
|
$
|
79,874
|
|
|
$
|
64,931
|
|
Residential mortgage-backed
|
14,754
|
|
|
1,578
|
|
|
—
|
|
|
16,332
|
|
|
14,754
|
|
|||||
Total held to maturity
|
79,685
|
|
|
16,521
|
|
|
—
|
|
|
96,206
|
|
|
79,685
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
432,145
|
|
|
13,941
|
|
|
(2,135
|
)
|
|
443,951
|
|
|
443,951
|
|
|||||
State and municipal:
|
|
|
|
|
|
|
|
|
|
||||||||||
Special revenue
|
2,770,582
|
|
|
80,887
|
|
|
(9,471
|
)
|
|
2,841,998
|
|
|
2,841,998
|
|
|||||
State general obligation
|
471,980
|
|
|
21,596
|
|
|
(1,359
|
)
|
|
492,217
|
|
|
492,217
|
|
|||||
Pre-refunded
|
312,535
|
|
|
21,825
|
|
|
(216
|
)
|
|
334,144
|
|
|
334,144
|
|
|||||
Corporate backed
|
384,609
|
|
|
10,609
|
|
|
(916
|
)
|
|
394,302
|
|
|
394,302
|
|
|||||
Local general obligation
|
354,110
|
|
|
26,507
|
|
|
(467
|
)
|
|
380,150
|
|
|
380,150
|
|
|||||
Total state and municipal
|
4,293,816
|
|
|
161,424
|
|
|
(12,429
|
)
|
|
4,442,811
|
|
|
4,442,811
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential (1)
|
997,886
|
|
|
13,968
|
|
|
(9,608
|
)
|
|
1,002,246
|
|
|
1,002,246
|
|
|||||
Commercial
|
190,352
|
|
|
566
|
|
|
(1,257
|
)
|
|
189,661
|
|
|
189,661
|
|
|||||
Total mortgage-backed securities
|
1,188,238
|
|
|
14,534
|
|
|
(10,865
|
)
|
|
1,191,907
|
|
|
1,191,907
|
|
|||||
Asset-backed
|
2,196,114
|
|
|
6,529
|
|
|
(10,613
|
)
|
|
2,192,030
|
|
|
2,192,030
|
|
|||||
Corporate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Industrial
|
2,394,374
|
|
|
73,884
|
|
|
(2,717
|
)
|
|
2,465,541
|
|
|
2,465,541
|
|
|||||
Financial
|
1,444,201
|
|
|
49,524
|
|
|
(4,929
|
)
|
|
1,488,796
|
|
|
1,488,796
|
|
|||||
Utilities
|
255,777
|
|
|
12,725
|
|
|
(576
|
)
|
|
267,926
|
|
|
267,926
|
|
|||||
Other
|
48,875
|
|
|
282
|
|
|
(18
|
)
|
|
49,139
|
|
|
49,139
|
|
|||||
Total corporate
|
4,143,227
|
|
|
136,415
|
|
|
(8,240
|
)
|
|
4,271,402
|
|
|
4,271,402
|
|
|||||
Foreign
|
854,298
|
|
|
38,773
|
|
|
(772
|
)
|
|
892,299
|
|
|
892,299
|
|
|||||
Total available for sale
|
13,107,838
|
|
|
371,616
|
|
|
(45,054
|
)
|
|
13,434,400
|
|
|
13,434,400
|
|
|||||
Total investments in fixed maturity securities
|
$
|
13,187,523
|
|
|
$
|
388,137
|
|
|
$
|
(45,054
|
)
|
|
$
|
13,530,606
|
|
|
$
|
13,514,085
|
|
(In thousands)
|
Amortized
Cost |
|
Gross Unrealized
|
|
Fair
Value |
|
Carrying
Value |
||||||||||||
Gains
|
|
Losses
|
|||||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal
|
$
|
72,582
|
|
|
$
|
12,453
|
|
|
$
|
—
|
|
|
$
|
85,035
|
|
|
$
|
72,582
|
|
Residential mortgage-backed
|
15,944
|
|
|
1,693
|
|
|
—
|
|
|
17,637
|
|
|
15,944
|
|
|||||
Total held to maturity
|
88,526
|
|
|
14,146
|
|
|
—
|
|
|
102,672
|
|
|
88,526
|
|
|||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
496,187
|
|
|
20,208
|
|
|
(2,593
|
)
|
|
513,802
|
|
|
513,802
|
|
|||||
State and municipal:
|
|
|
|
|
|
|
|
|
|
||||||||||
Special revenue
|
2,791,211
|
|
|
58,559
|
|
|
(26,315
|
)
|
|
2,823,455
|
|
|
2,823,455
|
|
|||||
State general obligation
|
524,682
|
|
|
16,964
|
|
|
(5,139
|
)
|
|
536,507
|
|
|
536,507
|
|
|||||
Pre-refunded
|
356,535
|
|
|
19,181
|
|
|
(165
|
)
|
|
375,551
|
|
|
375,551
|
|
|||||
Corporate backed
|
410,933
|
|
|
6,172
|
|
|
(6,452
|
)
|
|
410,653
|
|
|
410,653
|
|
|||||
Local general obligation
|
360,022
|
|
|
15,682
|
|
|
(2,367
|
)
|
|
373,337
|
|
|
373,337
|
|
|||||
Total state and municipal
|
4,443,383
|
|
|
116,558
|
|
|
(40,438
|
)
|
|
4,519,503
|
|
|
4,519,503
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential (1)
|
1,034,301
|
|
|
15,431
|
|
|
(12,950
|
)
|
|
1,036,782
|
|
|
1,036,782
|
|
|||||
Commercial
|
155,540
|
|
|
304
|
|
|
(2,981
|
)
|
|
152,863
|
|
|
152,863
|
|
|||||
Total mortgage-backed securities
|
1,189,841
|
|
|
15,735
|
|
|
(15,931
|
)
|
|
1,189,645
|
|
|
1,189,645
|
|
|||||
Asset-backed
|
1,913,830
|
|
|
5,971
|
|
|
(11,941
|
)
|
|
1,907,860
|
|
|
1,907,860
|
|
|||||
Corporate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Industrial
|
2,315,567
|
|
|
71,007
|
|
|
(7,174
|
)
|
|
2,379,400
|
|
|
2,379,400
|
|
|||||
Financial
|
1,369,001
|
|
|
39,543
|
|
|
(11,270
|
)
|
|
1,397,274
|
|
|
1,397,274
|
|
|||||
Utilities
|
229,154
|
|
|
10,801
|
|
|
(2,411
|
)
|
|
237,544
|
|
|
237,544
|
|
|||||
Other
|
54,073
|
|
|
299
|
|
|
(63
|
)
|
|
54,309
|
|
|
54,309
|
|
|||||
Total corporate
|
3,967,795
|
|
|
121,650
|
|
|
(20,918
|
)
|
|
4,068,527
|
|
|
4,068,527
|
|
|||||
Foreign
|
858,773
|
|
|
46,794
|
|
|
(2,762
|
)
|
|
902,805
|
|
|
902,805
|
|
|||||
Total available for sale
|
12,869,809
|
|
|
326,916
|
|
|
(94,583
|
)
|
|
13,102,142
|
|
|
13,102,142
|
|
|||||
Total investments in fixed maturity securities
|
$
|
12,958,335
|
|
|
$
|
341,062
|
|
|
$
|
(94,583
|
)
|
|
$
|
13,204,814
|
|
|
$
|
13,190,668
|
|
(1)
|
Gross unrealized gains and (losses) for residential mortgage-backed securities include
$25,220
and
$(818,691)
as of
June 30, 2017
and
December 31, 2016
, respectively, related to securities with the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income.
|
(In thousands)
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
803,520
|
|
|
$
|
819,242
|
|
Due after one year through five years
|
5,237,765
|
|
|
5,368,120
|
|
||
Due after five years through ten years
|
3,169,976
|
|
|
3,311,894
|
|
||
Due after ten years
|
2,773,270
|
|
|
2,823,111
|
|
||
Mortgage-backed securities
|
1,202,992
|
|
|
1,208,239
|
|
||
Total
|
$
|
13,187,523
|
|
|
$
|
13,530,606
|
|
(In thousands)
|
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Carrying
Value
|
||||||||||||
Gains
|
|
Losses
|
|
||||||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
$
|
87,185
|
|
|
$
|
366,106
|
|
|
$
|
(5,691
|
)
|
|
$
|
447,600
|
|
|
$
|
447,600
|
|
Preferred stocks
|
119,083
|
|
|
47,208
|
|
|
(1,084
|
)
|
|
165,207
|
|
|
165,207
|
|
|||||
Total
|
$
|
206,268
|
|
|
$
|
413,314
|
|
|
$
|
(6,775
|
)
|
|
$
|
612,807
|
|
|
$
|
612,807
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
$
|
94,998
|
|
|
$
|
351,906
|
|
|
$
|
(1,046
|
)
|
|
$
|
445,858
|
|
|
$
|
445,858
|
|
Preferred stocks
|
125,589
|
|
|
101,392
|
|
|
(3,639
|
)
|
|
223,342
|
|
|
223,342
|
|
|||||
Total
|
$
|
220,587
|
|
|
$
|
453,298
|
|
|
$
|
(4,685
|
)
|
|
$
|
669,200
|
|
|
$
|
669,200
|
|
|
For the Three Months
|
|
For the Six Months
|
||||||||||||
|
Ended June 30,
|
|
Ended June 30,
|
||||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Investment income earned on:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
116,796
|
|
|
$
|
108,342
|
|
|
$
|
229,142
|
|
|
$
|
217,177
|
|
Investment funds
|
8,895
|
|
|
18,456
|
|
|
35,544
|
|
|
35,092
|
|
||||
Arbitrage trading account
|
5,457
|
|
|
3,252
|
|
|
11,817
|
|
|
6,442
|
|
||||
Real estate
|
5,286
|
|
|
1,250
|
|
|
9,852
|
|
|
3,967
|
|
||||
Equity securities available for sale
|
602
|
|
|
1,280
|
|
|
1,241
|
|
|
2,148
|
|
||||
Gross investment income
|
137,036
|
|
|
132,580
|
|
|
287,596
|
|
|
264,826
|
|
||||
Investment expense
|
(1,772
|
)
|
|
(3,531
|
)
|
|
(3,473
|
)
|
|
(5,644
|
)
|
||||
Net investment income
|
$
|
135,264
|
|
|
$
|
129,049
|
|
|
$
|
284,123
|
|
|
$
|
259,182
|
|
|
Carrying Value as of
|
|
Income (Loss) from Investment Funds
|
||||||||||||
|
June 30,
|
|
December 31,
|
|
For the Six Months Ended June 30,
|
||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Real estate
|
$
|
611,598
|
|
|
$
|
641,783
|
|
|
$
|
19,518
|
|
|
$
|
22,414
|
|
Energy
|
86,690
|
|
|
91,448
|
|
|
(8,639
|
)
|
|
1,153
|
|
||||
Hedge equity
|
72,685
|
|
|
73,913
|
|
|
(1,228
|
)
|
|
(2,030
|
)
|
||||
Other funds
|
419,990
|
|
|
391,002
|
|
|
25,893
|
|
|
13,555
|
|
||||
Total
|
$
|
1,190,963
|
|
|
$
|
1,198,146
|
|
|
$
|
35,544
|
|
|
$
|
35,092
|
|
|
Carrying Value
|
||||||
|
June 30,
|
|
December 31,
|
||||
(In thousands)
|
2017
|
|
2016
|
||||
Properties in operation
|
$
|
447,721
|
|
|
$
|
457,237
|
|
Properties under development
|
869,368
|
|
|
727,744
|
|
||
Total
|
$
|
1,317,089
|
|
|
$
|
1,184,981
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Realized investment gains (losses):
|
|
|
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||
Gains
|
$
|
7,427
|
|
|
$
|
10,110
|
|
|
$
|
13,032
|
|
|
$
|
33,174
|
|
Losses
|
—
|
|
|
(1,480
|
)
|
|
(3,965
|
)
|
|
(4,420
|
)
|
||||
Equity securities available for sale
|
32,139
|
|
|
4,471
|
|
|
74,846
|
|
|
4,596
|
|
||||
Investment funds
|
(112
|
)
|
|
(4,793
|
)
|
|
1,155
|
|
|
(5,253
|
)
|
||||
Real estate
|
(364
|
)
|
|
(464
|
)
|
|
2,936
|
|
|
4,560
|
|
||||
Other
|
1,363
|
|
|
(1,529
|
)
|
|
4,797
|
|
|
(885
|
)
|
||||
Net realized gains on investments sales
|
40,453
|
|
|
6,315
|
|
|
92,801
|
|
|
31,772
|
|
||||
Other-than-temporary impairments (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,114
|
)
|
||||
Net investment gains
|
40,453
|
|
|
6,315
|
|
|
92,801
|
|
|
13,658
|
|
||||
Income tax expense
|
(14,159
|
)
|
|
(2,210
|
)
|
|
(32,480
|
)
|
|
(4,780
|
)
|
||||
After-tax net realized investment gains
|
$
|
26,294
|
|
|
$
|
4,105
|
|
|
$
|
60,321
|
|
|
$
|
8,878
|
|
Change in unrealized investment gains (losses)
of available for sale securities:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed maturity securities
|
$
|
56,857
|
|
|
$
|
122,893
|
|
|
$
|
94,841
|
|
|
$
|
215,321
|
|
Previously impaired fixed maturity securities
|
743
|
|
|
1,874
|
|
|
844
|
|
|
1,819
|
|
||||
Equity securities available for sale
|
6,176
|
|
|
27,814
|
|
|
(42,686
|
)
|
|
40,950
|
|
||||
Investment funds
|
4,506
|
|
|
4,004
|
|
|
5,712
|
|
|
12,885
|
|
||||
Total change in unrealized investment gains
|
68,282
|
|
|
156,585
|
|
|
58,711
|
|
|
270,975
|
|
||||
Income tax expense
|
(24,713
|
)
|
|
(51,552
|
)
|
|
(23,973
|
)
|
|
(89,087
|
)
|
||||
Noncontrolling interests
|
(5
|
)
|
|
(5
|
)
|
|
14
|
|
|
9
|
|
||||
After-tax change in unrealized investment gains of available for sale securities
|
$
|
43,564
|
|
|
$
|
105,028
|
|
|
$
|
34,752
|
|
|
$
|
181,897
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(In thousands)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency
|
$
|
115,584
|
|
|
$
|
935
|
|
|
$
|
30,925
|
|
|
$
|
1,200
|
|
|
$
|
146,509
|
|
|
$
|
2,135
|
|
State and municipal
|
860,362
|
|
|
10,961
|
|
|
112,597
|
|
|
1,468
|
|
|
972,959
|
|
|
12,429
|
|
||||||
Mortgage-backed securities
|
585,106
|
|
|
6,827
|
|
|
128,391
|
|
|
4,038
|
|
|
713,497
|
|
|
10,865
|
|
||||||
Asset-backed securities
|
1,424,602
|
|
|
6,921
|
|
|
75,179
|
|
|
3,692
|
|
|
1,499,781
|
|
|
10,613
|
|
||||||
Corporate
|
612,215
|
|
|
4,599
|
|
|
41,688
|
|
|
3,641
|
|
|
653,903
|
|
|
8,240
|
|
||||||
Foreign government
|
115,875
|
|
|
742
|
|
|
1,973
|
|
|
30
|
|
|
117,848
|
|
|
772
|
|
||||||
Fixed maturity securities
|
3,713,744
|
|
|
30,985
|
|
|
390,753
|
|
|
14,069
|
|
|
4,104,497
|
|
|
45,054
|
|
||||||
Common stocks
|
24,004
|
|
|
4,953
|
|
|
9,040
|
|
|
738
|
|
|
33,044
|
|
|
5,691
|
|
||||||
Preferred stocks
|
—
|
|
|
—
|
|
|
24,589
|
|
|
1,084
|
|
|
24,589
|
|
|
1,084
|
|
||||||
Equity securities available for sale
|
24,004
|
|
|
4,953
|
|
|
33,629
|
|
|
1,822
|
|
|
57,633
|
|
|
6,775
|
|
||||||
Total
|
$
|
3,737,748
|
|
|
$
|
35,938
|
|
|
$
|
424,382
|
|
|
$
|
15,891
|
|
|
$
|
4,162,130
|
|
|
$
|
51,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and government agency
|
$
|
112,709
|
|
|
$
|
1,252
|
|
|
$
|
35,450
|
|
|
$
|
1,341
|
|
|
$
|
148,159
|
|
|
$
|
2,593
|
|
State and municipal
|
1,562,614
|
|
|
35,553
|
|
|
133,034
|
|
|
4,885
|
|
|
1,695,648
|
|
|
40,438
|
|
||||||
Mortgage-backed securities
|
625,903
|
|
|
11,103
|
|
|
109,066
|
|
|
4,828
|
|
|
734,969
|
|
|
15,931
|
|
||||||
Asset-backed securities
|
1,010,836
|
|
|
5,340
|
|
|
201,693
|
|
|
6,601
|
|
|
1,212,529
|
|
|
11,941
|
|
||||||
Corporate
|
1,035,245
|
|
|
13,448
|
|
|
65,147
|
|
|
7,470
|
|
|
1,100,392
|
|
|
20,918
|
|
||||||
Foreign government
|
213,246
|
|
|
1,985
|
|
|
24,820
|
|
|
777
|
|
|
238,066
|
|
|
2,762
|
|
||||||
Fixed maturity securities
|
4,560,553
|
|
|
68,681
|
|
|
569,210
|
|
|
25,902
|
|
|
5,129,763
|
|
|
94,583
|
|
||||||
Common stocks
|
336
|
|
|
22
|
|
|
8,755
|
|
|
1,024
|
|
|
9,091
|
|
|
1,046
|
|
||||||
Preferred stocks
|
—
|
|
|
—
|
|
|
22,034
|
|
|
3,639
|
|
|
22,034
|
|
|
3,639
|
|
||||||
Equity securities available for sale
|
336
|
|
|
22
|
|
|
30,789
|
|
|
4,663
|
|
|
31,125
|
|
|
4,685
|
|
||||||
Total
|
$
|
4,560,889
|
|
|
$
|
68,703
|
|
|
$
|
599,999
|
|
|
$
|
30,565
|
|
|
$
|
5,160,888
|
|
|
$
|
99,268
|
|
($ in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross Unrealized
Loss
|
|||||
Foreign government
|
3
|
|
|
$
|
9,655
|
|
|
$
|
250
|
|
Mortgage-backed securities
|
6
|
|
|
6,239
|
|
|
215
|
|
||
Asset-backed securities
|
4
|
|
|
3,299
|
|
|
137
|
|
||
Corporate
|
2
|
|
|
2,922
|
|
|
232
|
|
||
Total
|
15
|
|
|
$
|
22,115
|
|
|
$
|
834
|
|
(In thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
443,951
|
|
|
$
|
—
|
|
|
$
|
443,951
|
|
|
$
|
—
|
|
State and municipal
|
4,442,811
|
|
|
—
|
|
|
4,442,811
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,191,907
|
|
|
—
|
|
|
1,191,907
|
|
|
—
|
|
||||
Asset-backed securities
|
2,192,030
|
|
|
—
|
|
|
2,191,857
|
|
|
173
|
|
||||
Corporate
|
4,271,402
|
|
|
—
|
|
|
4,271,402
|
|
|
—
|
|
||||
Foreign government
|
892,299
|
|
|
—
|
|
|
892,299
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
13,434,400
|
|
|
—
|
|
|
13,434,227
|
|
|
173
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
447,600
|
|
|
438,560
|
|
|
—
|
|
|
9,040
|
|
||||
Preferred stocks
|
165,207
|
|
|
—
|
|
|
161,545
|
|
|
3,662
|
|
||||
Total equity securities available for sale
|
612,807
|
|
|
438,560
|
|
|
161,545
|
|
|
12,702
|
|
||||
Arbitrage trading account
|
634,016
|
|
|
329,631
|
|
|
304,385
|
|
|
—
|
|
||||
Total
|
$
|
14,681,223
|
|
|
$
|
768,191
|
|
|
$
|
13,900,157
|
|
|
$
|
12,875
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Trading account securities sold but not yet purchased
|
$
|
62,860
|
|
|
$
|
62,855
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
513,802
|
|
|
$
|
—
|
|
|
$
|
513,802
|
|
|
$
|
—
|
|
State and municipal
|
4,519,503
|
|
|
—
|
|
|
4,519,503
|
|
|
—
|
|
||||
Mortgage-backed securities
|
1,189,645
|
|
|
—
|
|
|
1,189,645
|
|
|
—
|
|
||||
Asset-backed securities
|
1,907,860
|
|
|
—
|
|
|
1,907,677
|
|
|
183
|
|
||||
Corporate
|
4,068,527
|
|
|
—
|
|
|
4,068,527
|
|
|
—
|
|
||||
Foreign government
|
902,805
|
|
|
—
|
|
|
902,805
|
|
|
—
|
|
||||
Total fixed maturity securities available for sale
|
13,102,142
|
|
|
—
|
|
|
13,101,959
|
|
|
183
|
|
||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Common stocks
|
445,858
|
|
|
429,647
|
|
|
7,457
|
|
|
8,754
|
|
||||
Preferred stocks
|
223,342
|
|
|
—
|
|
|
219,680
|
|
|
3,662
|
|
||||
Total equity securities available for sale
|
669,200
|
|
|
429,647
|
|
|
227,137
|
|
|
12,416
|
|
||||
Arbitrage trading account
|
299,999
|
|
|
224,623
|
|
|
75,376
|
|
|
—
|
|
||||
Total
|
$
|
14,071,341
|
|
|
$
|
654,270
|
|
|
$
|
13,404,472
|
|
|
$
|
12,599
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Trading account securities sold but not yet purchased
|
$
|
51,179
|
|
|
$
|
51,089
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
Gains (Losses) Included in:
|
||||||||||||||||||||||||||||||||||
(In thousands)
|
Beginning
Balance
|
|
Earnings (Losses)
|
|
Other
Comprehensive
Income (Loss)
|
|
Impairments
|
|
Purchases
|
|
(Sales)
|
|
Paydowns / Maturities
|
|
Transfers
|
|
Ending
Balance
|
||||||||||||||||||
In / (Out)
|
|||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed maturities securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
$
|
183
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
173
|
|
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
183
|
|
|
2
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
173
|
|
|||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stocks
|
8,754
|
|
|
—
|
|
|
286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,040
|
|
|||||||||
Preferred stocks
|
3,662
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,662
|
|
|||||||||
Total
|
12,416
|
|
|
—
|
|
|
286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,702
|
|
|||||||||
Arbitrage trading account
|
—
|
|
|
(78
|
)
|
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
$
|
12,599
|
|
|
$
|
(76
|
)
|
|
$
|
380
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed maturities securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
$
|
199
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
$
|
—
|
|
|
$
|
183
|
|
Corporate
|
154
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(331
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
353
|
|
|
180
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
(331
|
)
|
|
(35
|
)
|
|
—
|
|
|
183
|
|
|||||||||
Equity securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common stocks
|
7,829
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,754
|
|
|||||||||
Preferred stocks
|
3,624
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,662
|
|
|||||||||
Total
|
11,453
|
|
|
38
|
|
|
160
|
|
|
—
|
|
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,416
|
|
|||||||||
Arbitrage trading account
|
176
|
|
|
(176
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
$
|
11,982
|
|
|
$
|
42
|
|
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
765
|
|
|
$
|
(331
|
)
|
|
$
|
(35
|
)
|
|
$
|
—
|
|
|
$
|
12,599
|
|
|
June 30,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Net reserves at beginning of year
|
$
|
9,590,265
|
|
|
$
|
9,244,872
|
|
Net provision for losses and loss expenses:
|
|
|
|
||||
Claims occurring during the current year (1)
|
1,926,394
|
|
|
1,878,458
|
|
||
Decrease in estimates for claims occurring in prior years (2) (3)
|
(6,458
|
)
|
|
(15,511
|
)
|
||
Loss reserve discount accretion
|
24,366
|
|
|
23,536
|
|
||
Total
|
1,944,302
|
|
|
1,886,483
|
|
||
Net payments for claims:
|
|
|
|
|
|
||
Current year
|
315,437
|
|
|
480,601
|
|
||
Prior year
|
1,432,828
|
|
|
1,188,704
|
|
||
Total
|
1,748,265
|
|
|
1,669,305
|
|
||
Foreign currency translation
|
37,097
|
|
|
(19,768
|
)
|
||
Net reserves at end of period
|
9,823,399
|
|
|
9,442,282
|
|
||
Ceded reserve at end of period
|
1,500,868
|
|
|
1,455,594
|
|
||
Gross reserves at end of period
|
$
|
11,324,267
|
|
|
$
|
10,897,876
|
|
(1)
|
Claims occurring during the current year are net of loss reserve discounts of $
11,349,000
and $
9,402,000
in 2017 and 2016, respectively.
|
(2)
|
The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $
14,873,000
and $
21,696,000
in 2017 and 2016, respectively.
|
(3)
|
For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was
$24 million
and
$29 million
as of June 30, 2017 and 2016, respectively.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(In thousands)
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities
|
$
|
13,514,085
|
|
|
$
|
13,530,606
|
|
|
$
|
13,190,668
|
|
|
$
|
13,204,814
|
|
Equity securities available for sale
|
612,807
|
|
|
612,807
|
|
|
669,200
|
|
|
669,200
|
|
||||
Arbitrage trading account
|
634,016
|
|
|
634,016
|
|
|
299,999
|
|
|
299,999
|
|
||||
Loans receivable
|
96,064
|
|
|
97,566
|
|
|
106,798
|
|
|
108,299
|
|
||||
Cash and cash equivalents
|
788,354
|
|
|
788,354
|
|
|
795,285
|
|
|
795,285
|
|
||||
Trading account receivables from brokers and clearing organizations
|
164,696
|
|
|
164,696
|
|
|
484,593
|
|
|
484,593
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Due to broker
|
124,428
|
|
|
124,428
|
|
|
19,416
|
|
|
19,416
|
|
||||
Trading account securities sold but not yet purchased
|
62,860
|
|
|
62,860
|
|
|
51,179
|
|
|
51,179
|
|
||||
Subordinated debentures
|
727,924
|
|
|
786,857
|
|
|
727,630
|
|
|
687,504
|
|
||||
Senior notes and other debt
|
1,759,115
|
|
|
1,952,275
|
|
|
1,760,595
|
|
|
1,914,727
|
|
|
For the Three Months
|
|
For the Six Months
|
||||||||||||
|
Ended June 30,
|
|
Ended June 30,
|
||||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Written premiums:
|
|
|
|
|
|
|
|
||||||||
Direct
|
$
|
1,727,014
|
|
|
$
|
1,708,535
|
|
|
$
|
3,448,076
|
|
|
$
|
3,417,664
|
|
Assumed
|
160,139
|
|
|
230,830
|
|
|
375,283
|
|
|
477,398
|
|
||||
Ceded
|
(322,902
|
)
|
|
(296,796
|
)
|
|
(612,270
|
)
|
|
(588,771
|
)
|
||||
Total net premiums written
|
$
|
1,564,251
|
|
|
$
|
1,642,569
|
|
|
$
|
3,211,089
|
|
|
$
|
3,306,291
|
|
|
|
|
|
|
|
|
|
||||||||
Earned premiums:
|
|
|
|
|
|
|
|
||||||||
Direct
|
$
|
1,666,938
|
|
|
$
|
1,609,644
|
|
|
$
|
3,280,302
|
|
|
$
|
3,177,712
|
|
Assumed
|
193,683
|
|
|
225,643
|
|
|
402,310
|
|
|
444,009
|
|
||||
Ceded
|
(291,918
|
)
|
|
(275,494
|
)
|
|
(543,868
|
)
|
|
(534,593
|
)
|
||||
Total net premiums earned
|
$
|
1,568,703
|
|
|
$
|
1,559,793
|
|
|
$
|
3,138,744
|
|
|
$
|
3,087,128
|
|
|
|
|
|
|
|
|
|
||||||||
Ceded losses and loss expenses incurred
|
$
|
142,609
|
|
|
$
|
167,265
|
|
|
$
|
177,801
|
|
|
$
|
294,194
|
|
Ceded commissions earned
|
$
|
57,752
|
|
|
$
|
50,172
|
|
|
$
|
114,302
|
|
|
$
|
96,494
|
|
($ in thousands)
|
Units
|
|
Fair Value
|
|||
2017
|
6,020
|
|
|
$
|
405
|
|
2016
|
17,654
|
|
|
$
|
964
|
|
•
|
Insurance
- primarily commercial insurance business, including excess and surplus lines and admitted lines in the United States, United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia; and
|
•
|
Reinsurance
- reinsurance business on a facultative and treaty basis, primarily in the United States, United Kingdom, Continental Europe, Australia, the Asia-Pacific Region and South Africa.
|
|
Revenues
|
|
|
|
|
||||||||||||||||||
(In thousands)
|
Earned
Premiums
|
|
Investment
Income
|
|
Other
|
|
Total (1)
|
|
Pre-Tax
Income
(Loss)
|
|
Net Income
(Loss) to Common Stockholders
|
||||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance
|
$
|
1,415,586
|
|
|
$
|
102,719
|
|
|
$
|
22,984
|
|
|
$
|
1,541,289
|
|
|
$
|
186,134
|
|
|
$
|
124,442
|
|
Reinsurance
|
153,117
|
|
|
21,491
|
|
|
—
|
|
|
174,608
|
|
|
14,771
|
|
|
10,324
|
|
||||||
Corporate, other and eliminations (2)
|
—
|
|
|
11,054
|
|
|
80,645
|
|
|
91,699
|
|
|
(80,397
|
)
|
|
(52,056
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
40,453
|
|
|
40,453
|
|
|
40,453
|
|
|
26,294
|
|
||||||
Total
|
$
|
1,568,703
|
|
|
$
|
135,264
|
|
|
$
|
144,082
|
|
|
$
|
1,848,049
|
|
|
$
|
160,961
|
|
|
$
|
109,004
|
|
Three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance
|
$
|
1,390,744
|
|
|
$
|
94,155
|
|
|
$
|
27,603
|
|
|
$
|
1,512,502
|
|
|
$
|
176,500
|
|
|
$
|
119,135
|
|
Reinsurance
|
169,049
|
|
|
25,372
|
|
|
—
|
|
|
194,421
|
|
|
23,834
|
|
|
16,681
|
|
||||||
Corporate, other and eliminations (2)
|
—
|
|
|
9,522
|
|
|
133,154
|
|
|
142,676
|
|
|
(48,335
|
)
|
|
(30,954
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
6,315
|
|
|
6,315
|
|
|
6,315
|
|
|
4,105
|
|
||||||
Total
|
$
|
1,559,793
|
|
|
$
|
129,049
|
|
|
$
|
167,072
|
|
|
$
|
1,855,914
|
|
|
$
|
158,314
|
|
|
$
|
108,967
|
|
Six months ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance
|
$
|
2,828,755
|
|
|
214,628
|
|
|
$
|
41,271
|
|
|
$
|
3,084,654
|
|
|
$
|
386,127
|
|
|
$
|
257,458
|
|
|
Reinsurance
|
309,989
|
|
|
46,269
|
|
|
—
|
|
|
356,258
|
|
|
19,364
|
|
|
13,983
|
|
||||||
Corporate, other and eliminations (2)
|
—
|
|
|
23,226
|
|
|
161,528
|
|
|
184,754
|
|
|
(153,034
|
)
|
|
(99,311
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
92,801
|
|
|
92,801
|
|
|
92,801
|
|
|
60,321
|
|
||||||
Total
|
$
|
3,138,744
|
|
|
$
|
284,123
|
|
|
$
|
295,600
|
|
|
$
|
3,718,467
|
|
|
$
|
345,258
|
|
|
$
|
232,451
|
|
Six months ended June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance
|
$
|
2,757,350
|
|
|
$
|
193,605
|
|
|
$
|
54,396
|
|
|
$
|
3,005,351
|
|
|
$
|
376,153
|
|
|
$
|
253,639
|
|
Reinsurance
|
329,778
|
|
|
49,552
|
|
|
—
|
|
|
379,330
|
|
|
51,893
|
|
|
36,070
|
|
||||||
Corporate, other and eliminations (2)
|
—
|
|
|
16,025
|
|
|
248,761
|
|
|
264,786
|
|
|
(108,714
|
)
|
|
(70,110
|
)
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
13,658
|
|
|
13,658
|
|
|
13,658
|
|
|
8,878
|
|
||||||
Total
|
$
|
3,087,128
|
|
|
$
|
259,182
|
|
|
$
|
316,815
|
|
|
$
|
3,663,125
|
|
|
$
|
332,990
|
|
|
$
|
228,477
|
|
(In thousands)
|
June 30, 2017
|
|
December 31, 2016
|
||||
Insurance
|
$
|
18,687,170
|
|
|
$
|
19,137,758
|
|
Reinsurance
|
3,085,961
|
|
|
2,524,338
|
|
||
Corporate, other and eliminations
|
2,220,360
|
|
|
1,687,980
|
|
||
Consolidated
|
$
|
23,993,491
|
|
|
$
|
23,350,076
|
|
|
For the Three Months
|
|
For the Six Months
|
||||||||||||
|
Ended June 30,
|
|
Ended June 30,
|
||||||||||||
(In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Insurance:
|
|
|
|
|
|
|
|
||||||||
Other liability
|
$
|
460,059
|
|
|
$
|
433,472
|
|
|
$
|
911,889
|
|
|
$
|
847,000
|
|
Workers’ compensation
|
366,950
|
|
|
344,736
|
|
|
728,086
|
|
|
688,317
|
|
||||
Short-tail lines (1)
|
290,696
|
|
|
322,493
|
|
|
599,930
|
|
|
649,570
|
|
||||
Commercial automobile
|
161,526
|
|
|
159,892
|
|
|
319,653
|
|
|
316,709
|
|
||||
Professional liability
|
136,355
|
|
|
130,151
|
|
|
269,197
|
|
|
255,754
|
|
||||
Total Insurance
|
1,415,586
|
|
|
1,390,744
|
|
|
2,828,755
|
|
|
2,757,350
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
||||||||
Casualty
|
93,212
|
|
|
100,113
|
|
|
187,952
|
|
|
204,418
|
|
||||
Property
|
59,905
|
|
|
68,936
|
|
|
122,037
|
|
|
125,360
|
|
||||
Total Reinsurance
|
153,117
|
|
|
169,049
|
|
|
309,989
|
|
|
329,778
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
1,568,703
|
|
|
$
|
1,559,793
|
|
|
$
|
3,138,744
|
|
|
$
|
3,087,128
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
(In thousands)
|
June 30, 2017
|
|
December 31, 2016
|
||||
Insurance
|
$
|
8,130,712
|
|
|
$
|
7,913,074
|
|
Reinsurance
|
1,692,687
|
|
|
1,677,191
|
|
||
Net reserves for losses and loss expenses
|
9,823,399
|
|
|
9,590,265
|
|
||
Ceded reserves for losses and loss expenses
|
1,500,868
|
|
|
1,606,930
|
|
||
Gross reserves for losses and loss expenses
|
$
|
11,324,267
|
|
|
$
|
11,197,195
|
|
(In thousands)
|
Reported Case
Reserves
|
|
Incurred But
Not Reported
|
|
Total
|
||||||
June 30, 2017
|
|
|
|
|
|
||||||
Other liability
|
$
|
1,180,974
|
|
|
$
|
2,137,557
|
|
|
$
|
3,318,531
|
|
Workers’ compensation (1)
|
1,491,844
|
|
|
1,246,106
|
|
|
2,737,950
|
|
|||
Professional liability
|
294,602
|
|
|
566,555
|
|
|
861,157
|
|
|||
Commercial automobile
|
338,963
|
|
|
261,732
|
|
|
600,695
|
|
|||
Short-tail lines (2)
|
310,387
|
|
|
301,992
|
|
|
612,379
|
|
|||
Total Insurance
|
3,616,770
|
|
|
4,513,942
|
|
|
8,130,712
|
|
|||
Reinsurance (1)
|
875,600
|
|
|
817,087
|
|
|
1,692,687
|
|
|||
Total
|
$
|
4,492,370
|
|
|
$
|
5,331,029
|
|
|
$
|
9,823,399
|
|
|
|
|
|
|
|
||||||
December 31, 2016
|
|
|
|
|
|
||||||
Other liability
|
$
|
1,159,082
|
|
|
$
|
2,061,966
|
|
|
$
|
3,221,048
|
|
Workers’ compensation (1)
|
1,453,318
|
|
|
1,228,774
|
|
|
2,682,092
|
|
|||
Professional liability
|
264,188
|
|
|
542,539
|
|
|
806,727
|
|
|||
Commercial automobile
|
344,143
|
|
|
252,978
|
|
|
597,121
|
|
|||
Short-tail lines (2)
|
322,872
|
|
|
283,214
|
|
|
606,086
|
|
|||
Total Insurance
|
3,543,603
|
|
|
4,369,471
|
|
|
7,913,074
|
|
|||
Reinsurance (1)
|
823,516
|
|
|
853,675
|
|
|
1,677,191
|
|
|||
Total
|
$
|
4,367,119
|
|
|
$
|
5,223,146
|
|
|
$
|
9,590,265
|
|
(In thousands)
|
2017
|
|
2016
|
||||
Net decrease in prior year loss reserves
|
$
|
6,459
|
|
|
$
|
15,511
|
|
Increase in prior year earned premiums
|
17,111
|
|
|
13,145
|
|
||
Net favorable prior year development
|
$
|
23,570
|
|
|
$
|
28,656
|
|
($ in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross Unrealized
Loss
|
|||||
Unrealized loss less than 20% of amortized cost
|
588
|
|
|
$
|
4,104,317
|
|
|
$
|
44,927
|
|
Unrealized loss of 20% or greater of amortized cost:
|
|
|
|
|
|
|||||
Less than twelve months
|
1
|
|
|
8
|
|
|
2
|
|
||
Twelve months and longer
|
2
|
|
|
172
|
|
|
125
|
|
||
Total
|
591
|
|
|
$
|
4,104,497
|
|
|
$
|
45,054
|
|
($ in thousands)
|
Number of
Securities
|
|
Aggregate
Fair Value
|
|
Gross Unrealized
Loss |
|||||
Foreign government
|
3
|
|
|
$
|
9,655
|
|
|
250
|
|
|
Mortgage-backed securities
|
6
|
|
|
6,239
|
|
|
215
|
|
||
Asset-backed securities
|
4
|
|
|
3,299
|
|
|
137
|
|
||
Corporate
|
2
|
|
|
2,922
|
|
|
232
|
|
||
Total
|
15
|
|
|
$
|
22,115
|
|
|
$
|
834
|
|
($ in thousands)
|
Carrying
Value
|
|
Percent
of Total
|
|||
Pricing source:
|
|
|
|
|||
Independent pricing services
|
$
|
13,153,112
|
|
|
97.9
|
%
|
Syndicate manager
|
46,812
|
|
|
0.4
|
|
|
Directly by the Company based on:
|
|
|
|
|||
Observable data
|
234,303
|
|
|
1.7
|
|
|
Cash flow model
|
173
|
|
|
—
|
|
|
Total
|
$
|
13,434,400
|
|
|
100.0
|
%
|
($ in thousands)
|
2017
|
|
2016
|
||||
Insurance:
|
|
|
|
||||
Gross premiums written
|
$
|
3,515,139
|
|
|
$
|
3,495,321
|
|
Net premiums written
|
2,932,303
|
|
|
2,942,958
|
|
||
Net premiums earned
|
2,828,755
|
|
|
2,757,350
|
|
||
Loss ratio
|
61.0
|
%
|
|
61.2
|
%
|
||
Expense ratio
|
33.0
|
%
|
|
32.4
|
%
|
||
GAAP combined ratio
|
94.0
|
%
|
|
93.6
|
%
|
||
Reinsurance:
|
|
|
|
||||
Gross premiums written
|
$
|
308,220
|
|
|
$
|
399,741
|
|
Net premiums written
|
278,786
|
|
|
363,333
|
|
||
Net premiums earned
|
309,989
|
|
|
329,778
|
|
||
Loss ratio
|
70.6
|
%
|
|
60.1
|
%
|
||
Expense ratio
|
38.1
|
%
|
|
39.2
|
%
|
||
GAAP combined ratio
|
108.7
|
%
|
|
99.3
|
%
|
||
Consolidated:
|
|
|
|
||||
Gross premiums written
|
$
|
3,823,359
|
|
|
$
|
3,895,062
|
|
Net premiums written
|
3,211,089
|
|
|
3,306,291
|
|
||
Net premiums earned
|
3,138,744
|
|
|
3,087,128
|
|
||
Loss ratio
|
61.9
|
%
|
|
61.1
|
%
|
||
Expense ratio
|
33.5
|
%
|
|
33.1
|
%
|
||
GAAP combined ratio
|
95.4
|
%
|
|
94.2
|
%
|
(In thousands, except per share data)
|
2017
|
|
2016
|
||||
Net income to common stockholders
|
$
|
232,451
|
|
|
$
|
228,477
|
|
Weighted average diluted shares
|
128,546
|
|
|
128,562
|
|
||
Net income per diluted share
|
$
|
1.81
|
|
|
$
|
1.78
|
|
•
|
Insurance - gross premiums increased less than 1% to $3,515 million in 2017 from $3,495 million in 2016. Gross premiums increased $20 million (6%) for professional liability, $13 million (4%) for commercial auto and $2 million (less than 1%) for other liability, and decreased $11 million (1%) for short-tail lines and $4 million (less than 1%) for workers' compensation.
|
•
|
Reinsurance - gross premiums decreased 23% to $308 million in 2017 from $400 million in 2016. Gross premiums decreased $61 million (36%) for property lines and $31 million (13%) for casualty lines.
|
|
Amount
|
|
Average Annualized
Yield
|
||||||||||
($ In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
229,142
|
|
|
$
|
217,177
|
|
|
3.3
|
%
|
|
3.2
|
%
|
Investment funds
|
35,544
|
|
|
35,092
|
|
|
5.7
|
|
|
5.8
|
|
||
Arbitrage trading account
|
11,817
|
|
|
6,442
|
|
|
4.3
|
|
|
3.6
|
|
||
Real estate
|
9,852
|
|
|
3,967
|
|
|
1.6
|
|
|
0.8
|
|
||
Equity securities available for sale
|
1,241
|
|
|
2,148
|
|
|
1.2
|
|
|
2.4
|
|
||
Gross investment income
|
287,596
|
|
|
264,826
|
|
|
3.3
|
|
|
3.2
|
|
||
Investment expenses
|
(3,473
|
)
|
|
(5,644
|
)
|
|
|
|
|
||||
Total
|
$
|
284,123
|
|
|
$
|
259,182
|
|
|
3.3
|
%
|
|
3.2
|
%
|
•
|
Insurance - The loss ratio was 61.0% in 2017 and 61.2% in 2016. Catastrophe losses were $47 million in 2017 compared with $48 million in 2016. Favorable prior year reserve development was $49 million in 2017 and $25 million in 2016. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.7 points to 61.0% in 2017 from 60.3% in 2016.
|
•
|
Reinsurance - The loss ratio of 70.6% in 2017 was 10.5 points
higher
than the loss ratio of 60.1% in 2016. Catastrophe losses were $1 million in 2017 compared with $8 million in 2016. Adverse prior year reserve development was $26 million in 2017 compared with favorable prior year development of $4 million in 2016. The loss ratio excluding catastrophe losses and prior year reserve development i
ncreased 2.5
points to 62.1% in 2017 from 59.6% in 2016.
|
(In thousands)
|
2017
|
|
2016
|
||||
Policy acquisition and operating insurance expenses
|
$
|
1,051,116
|
|
|
$
|
1,021,542
|
|
Insurance service expenses
|
64,856
|
|
|
71,426
|
|
||
Net foreign currency (gains) losses
|
12,477
|
|
|
(9,356
|
)
|
||
Other costs and expenses
|
91,883
|
|
|
80,802
|
|
||
Total
|
$
|
1,220,332
|
|
|
$
|
1,164,414
|
|
($ in thousands)
|
2017
|
|
2016
|
||||
Insurance:
|
|
|
|
||||
Gross premiums written
|
$
|
1,745,734
|
|
|
$
|
1,743,290
|
|
Net premiums written
|
1,438,169
|
|
|
1,463,751
|
|
||
Net premiums earned
|
1,415,586
|
|
|
1,390,744
|
|
||
Loss ratio
|
61.1
|
%
|
|
61.9
|
%
|
||
Expense ratio
|
33.0
|
%
|
|
32.3
|
%
|
||
GAAP combined ratio
|
94.1
|
%
|
|
94.2
|
%
|
||
Reinsurance:
|
|
|
|
||||
Gross premiums written
|
$
|
141,418
|
|
|
$
|
196,077
|
|
Net premiums written
|
126,082
|
|
|
178,818
|
|
||
Net premiums earned
|
153,117
|
|
|
169,049
|
|
||
Loss ratio
|
65.2
|
%
|
|
60.9
|
%
|
||
Expense ratio
|
39.2
|
%
|
|
40.0
|
%
|
||
GAAP combined ratio
|
104.4
|
%
|
|
100.9
|
%
|
||
Consolidated:
|
|
|
|
||||
Gross premiums written
|
$
|
1,887,152
|
|
|
$
|
1,939,367
|
|
Net premiums written
|
1,564,251
|
|
|
1,642,569
|
|
||
Net premiums earned
|
1,568,703
|
|
|
1,559,793
|
|
||
Loss ratio
|
61.5
|
%
|
|
61.8
|
%
|
||
Expense ratio
|
33.6
|
%
|
|
33.1
|
%
|
||
GAAP combined ratio
|
95.1
|
%
|
|
94.9
|
%
|
(In thousands, except per share data)
|
2017
|
|
2016
|
||||
Net income to common stockholders
|
$
|
109,004
|
|
|
$
|
108,967
|
|
Weighted average diluted shares
|
128,601
|
|
|
128,575
|
|
||
Net income per diluted share
|
$
|
0.85
|
|
|
$
|
0.85
|
|
•
|
Insurance - gross premiums increased less than 1% to $1,746 million in 2017 from $1,743 million in 2016. Gross premiums increased $5 million (3%) for commercial auto and $4 million (2%) for professional liability, and decreased $4 million (1%) for short tail lines, $1 million (less than 1%) for workers' compensation, and $1 million (less than 1%) for other liability.
|
•
|
Reinsurance - gross premiums decreased 28% to $141 million in 2017 from $196 million in 2016. Gross premiums decreased $32 million (42%) for property lines and decreased $23 million (19%) for casualty lines.
|
|
Amount
|
|
Average Annualized
Yield
|
||||||||||
($ In thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Fixed maturity securities, including cash and cash equivalents and loans receivable
|
$
|
116,796
|
|
|
$
|
108,342
|
|
|
3.3
|
%
|
|
3.2
|
%
|
Investment funds
|
8,895
|
|
|
18,456
|
|
|
2.9
|
|
|
6.0
|
|
||
Arbitrage trading account
|
5,457
|
|
|
3,252
|
|
|
3.4
|
|
|
3.6
|
|
||
Real estate
|
5,286
|
|
|
1,250
|
|
|
1.7
|
|
|
0.5
|
|
||
Equity securities available for sale
|
602
|
|
|
1,280
|
|
|
1.2
|
|
|
2.5
|
|
||
Gross investment income
|
137,036
|
|
|
132,580
|
|
|
3.2
|
|
|
3.2
|
|
||
Investment expenses
|
(1,772
|
)
|
|
(3,531
|
)
|
|
|
|
|
||||
Total
|
$
|
135,264
|
|
|
$
|
129,049
|
|
|
3.1
|
%
|
|
3.1
|
%
|
•
|
Insurance - The loss ratio of 61.1% in 2017 was 0.8 points lower than the loss ratio of 61.9% in 2016. Catastrophe losses were $33 million in both 2017 and 2016. Favorable prior year reserve development was $23 million in 2017 and $13 million in 2016. The loss ratio, excluding catastrophe losses and prior year reserve development, remained flat at 60.4% for both 2017 and 2016.
|
•
|
Reinsurance - The loss ratio of 65.2% in 2017 was 4.3 points higher than the loss ratio of 60.9% in 2016. Catastrophe losses were $0.5 million in 2017 compared with $8 million in 2016. Adverse prior year reserve development was $2 million in 2017 compared with favorable prior year reserve development of $3 million in 2016. The loss ratio, excluding catastrophe losses and prior year reserve development, increased 4.1 points to 63.5% in 2017 from 59.4% in 2016.
|
(In thousands)
|
2017
|
|
2016
|
||||
Policy acquisition and operating insurance expenses
|
$
|
527,707
|
|
|
$
|
516,287
|
|
Insurance service expenses
|
34,923
|
|
|
37,628
|
|
||
Net foreign currency (gains) losses
|
6,968
|
|
|
(13,084
|
)
|
||
Other costs and expenses
|
47,034
|
|
|
41,124
|
|
||
Total
|
$
|
616,632
|
|
|
$
|
581,955
|
|
($ in thousands)
|
Carrying
Value
|
|
Percent
of Total
|
|||
Fixed maturity securities:
|
|
|
|
|||
U.S. government and government agencies
|
$
|
443,951
|
|
|
2.4
|
%
|
State and municipal:
|
|
|
|
|||
Special revenue
|
2,866,475
|
|
|
15.8
|
|
|
State general obligation
|
527,378
|
|
|
2.9
|
|
|
Corporate backed
|
394,302
|
|
|
2.2
|
|
|
Local general obligation
|
384,738
|
|
|
2.1
|
|
|
Pre-refunded (1)
|
334,849
|
|
|
1.8
|
|
|
Total state and municipal
|
4,507,742
|
|
|
24.8
|
|
|
Mortgage-backed securities:
|
|
|
|
|||
Agency
|
765,931
|
|
|
4.2
|
|
|
Residential-Prime
|
226,096
|
|
|
1.2
|
|
|
Commercial
|
189,661
|
|
|
1.0
|
|
|
Residential-Alt A
|
24,973
|
|
|
0.2
|
|
|
Total mortgage-backed securities
|
1,206,661
|
|
|
6.6
|
|
|
Asset-backed securities
|
2,192,030
|
|
|
12.1
|
|
|
Corporate:
|
|
|
|
|||
Industrial
|
2,465,541
|
|
|
13.6
|
|
|
Financial
|
1,488,796
|
|
|
8.2
|
|
|
Utilities
|
267,926
|
|
|
1.5
|
|
|
Other
|
49,139
|
|
|
0.3
|
|
|
Total corporate
|
4,271,402
|
|
|
23.6
|
|
|
Foreign government and foreign government agencies
|
892,299
|
|
|
4.9
|
|
|
Total fixed maturity securities
|
13,514,085
|
|
|
74.4
|
|
|
Equity securities available for sale:
|
|
|
|
|||
Common Stocks
|
447,600
|
|
|
2.5
|
|
|
Preferred stocks
|
165,207
|
|
|
0.9
|
|
|
Total equity securities available for sale
|
612,807
|
|
|
3.4
|
|
|
Real estate
|
1,317,089
|
|
|
7.3
|
|
|
Investment funds
|
1,190,963
|
|
|
6.6
|
|
|
Cash and cash equivalents
|
788,354
|
|
|
4.3
|
|
|
Arbitrage trading account
|
634,016
|
|
|
3.5
|
|
|
Loans receivable
|
96,064
|
|
|
0.5
|
|
|
Total investments
|
$
|
18,153,378
|
|
|
100.0
|
%
|
(In thousands)
|
Carrying Value
|
||
Argentina
|
$
|
241,242
|
|
Australia
|
221,199
|
|
|
Canada
|
165,253
|
|
|
United Kingdom
|
82,870
|
|
|
Brazil
|
49,075
|
|
|
Germany
|
47,367
|
|
|
Supranational (1)
|
35,004
|
|
|
Norway
|
20,084
|
|
|
Singapore
|
15,800
|
|
|
Colombia
|
7,484
|
|
|
Uruguay
|
6,921
|
|
|
Total
|
$
|
892,299
|
|
Number
|
|
|
|
|
|
(31.1)
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
|
|
|
|
(31.2)
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
|
|
|
|
(32.1)
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
W. R. BERKLEY CORPORATION
|
Date:
|
August 7, 2017
|
/s/ W. Robert Berkley, Jr.
|
|
|
W. Robert Berkley, Jr.
|
|
|
President and Chief Executive Officer
|
|
|
|
Date:
|
August 7, 2017
|
/s/ Richard M. Baio
|
|
|
Richard M. Baio
|
|
|
Senior Vice President - Chief Financial Officer and Treasurer
|
|
/s/ W. Robert Berkley, Jr.
|
|
W. Robert Berkley, Jr.
|
|
President and
Chief Executive Officer
|
|
/s/ Richard M. Baio
|
|
Richard M. Baio
|
|
Senior Vice President — Chief Financial Officer and Treasurer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ W. Robert Berkley, Jr.
|
W. Robert Berkley, Jr.
|
President and Chief Executive Officer
|
|
/s/ Richard M. Baio
|
Richard M. Baio
|
Senior Vice President — Chief Financial Officer and Treasurer
|